Banks aren't seriously considering merging as yet as they haven't really felt the full heat of the sector's liberalisation, he said.
BNM has been opening up the market to foreign players in stages and this year, it welcomed five commercial banks, including France's BNP Paribas SA.
Over the years, the central bank has issued 19 licences for commercial banking, and three for Islamic banking, to foreign operators.
"We're still at the beginning stage of liberalisation ... so its impact has not really crept into our market as yet," said Soo Hoo Khoon Yean, a financial services partner at PwC Malaysia.
He noted that there are limited targets at home and so there is a large gap in price expectations between potential buyers and sellers.
"However, once you have greater competition, there'll be laggards and only then you'll see a greater need to merge. The expectation gap will narrow, but that will take time," he said, adding that it may take longer than the next 12 to 18 months for banks to feel the full impact of liberalisation.
"I think (BNM) is doing the right thing where they're not forcing the banks to marry anyone, but creating a more competitive environment where weaker banks will (naturally) be forced out," he remarked.
He said upcoming Basel 3 rules, which will require banks to have stronger capital, may also hasten local mergers. Those rules are currently being firmed up.
"If it requires shareholders to potentially put in more money into the business, then that may also be a potential catalyst," Soo noted.
For now, however, he said banks are likely to be trying to rack up profits and strengthen assets before thinking about selling.
There are currently nine local banking groups in Malaysia.